Experts taking part in Euromoney’s country-risk
survey have cast doubt on Brazil as an investment destination
in recent years. Besides Argentina and Venezuela, the two
prominent defaulters, Latin America’s largest
country has seen its risk score decline more than any other, to
58.5 out of a possible 100 points. Brazil’s risk
score started to fall a long time before its economy slipped
into recession this year. Experts lost faith in a growth-model
driven by domestic demand with private consumption and
investment weakening, and fiscal pressures exacerbated by World
Cup-related public spending at a time when the commodity cycle
has turned less favourable. Over the past three years, all but
two of Brazil’s 15 survey indicators for
political, economic and structural risk have deteriorated. An
inflexible labour market, poor infrastructure, complicated tax
system and stifling regulations explain the falling score for
Brazil’s regulatory and policymaking environment
– the one economic indicator sliding faster than any
other this past year.

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